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Ford gets credit rating boost from Fitch

Shanks said the company will continue focusing on growth and "achieving strong investment grade ratings and maintaining investment grade throughout an economic cycle."

Ford will need an upgrade from Standard & Poor's or Moody's to continue repairing its balance sheet.

Fitch raised Ford's credit to "BBB minus" from "BB plus" Tuesday.

"The upgrade of Ford's ratings reflects the automaker's significantly improved financial performance, balance sheet repair and product portfolio improvement that have taken place over the past several years," Fitch said in a release.

The agency said Ford's restructuring — the firm began taking action when it lost its rating in 2005 amid billions in losses requiring it to borrow $23.5 billion.

When Alan Mulally took over in 2006 he began streamlining production and whittling down brands, closing plants, cutting jobs and focusing on energy-efficient vehicles, leading to billions in profits and putting the firm in a "better position to weather the likely mix shifts to smaller vehicles typically seen in economic downturns," Fitch said.

The moves helped Ford avoid the need for government assistance in 2009, which was accepted by GM and Chrysler in 2009.

"Fitch believes that the work that has been accomplished has put the company in a solid position to withstand the significant cyclical and secular pressures faced by the global auto industry."

The ratings agency said Ford's current financial position will help it maintain an investment-grade credit profile in a period of economic stress.

Still, the company faces continued risks including the uncertainty of the global economic recovery and, with it, the durability of global auto demand.

Although the global auto market is expected to continue growing, Fitch expects the rate of growth is likely to be slower than earlier projections, as much of Western Europe experiences recessionary conditions and demand growth slows in key emerging markets like China and India.

In the United States, high unemployment, a weak housing market and rising gas prices could put some pressure on growth, Fitch said.

Still, Fitch expects that Ford would burn a substantial amount of cash in a downturn.

"However, Fitch believes the company's net cash position of nearly $10 billion at year-end 2011 and other sources of liquidity give Ford the ability to withstand this likely cash burn without creating liquidity pressures," the agency said.

The agency said it would consider a future upgrade if Ford's margins and free cash flow continue to grow, resulting in further financial flexibility, including further declines in debt and pension obligations.

Ratings could drop again if a "very severe downturn in the global auto market leads to a significant weakening" of Ford's liquidity position.

But Fitch said a downturn has already been factored into the recent revision and the agency "believes the company is in a significantly better position to withstand a future downturn than it was prior to the last recession."